AthensBook made a name for itself in 2009 as a free mobile phone application that served busy urbanites lost in the asphalt jungle of the Greek capital with easy-to-use, real-time location-based data: open pharmacies in the neighborhood, the cheapest gas stations and nearest on-duty hospitals — all at the tap of a touchscreen.

Three years and 145,000 downloads later, the two friends and business partners behind the project, 30-somethings Dimosthenis Kaponis and Yorgos Panzaris, are hoping to make fresh ripples in the local app ecosystem by unveiling an update that provides users with better, richer and more “social” content.

But the overall aim has not changed.

“Our goal is to provide the information people actually need while on the go,” said Kaponis from the team’s brand-new offices in Halandri, a leafy suburb in northeastern Athens. “This does not mean stuffing hundreds of mostly unused and irrelevant bits of information inside a database and serving those. Our vision lies in evaluating and providing exactly what every single one of our users needs, without them worrying too much about it,” he added.

AthensBook is available on iOS and Android, and it will soon be available in Windows 8 for tablet devices, after being selected as one of the very few companies that partnered with Microsoft in order to provide locally valuable applications for its new operating system.

Using one of those gadgets, you can now find your closest watering hole, order home delivery from the most popular pizza parlors, see what museums and archaeological sites are open, avoid traffic and even watch movie trailers with a few swipes of your finger.

Beyond the valley

AthensBook is one of an estimated 2 million apps worldwide that will be available for download by the end of 2012. A stunning 15,000 apps are released every year, far more than any other type of media — a factor that makes its success all the more remarkable.

Greece, of course, is another.

In spite of repeated pledges by politicians here to improve the notoriously hostile business environment, the country remains riddled with disincentives. Start-ups have to grapple with eye-popping bureaucracy, complex legislation and an erratic tax system. A recent report by McKinsey & Company described the Greek economy as “chronically suffering from unfavorable conditions for business.”

Kaponis puts it more mildly. “There are significant obstacles to the creation of a powerful, capable, world-class high-tech community,” he said. With the economy in its fifth year of recession, youth unemployment has skyrocketed above 50 percent.

Like many of their tech-savvy peers, the creators of AthensBook have both spent considerable quality time outside Greece. Kaponis got his M.Eng in information systems engineering from Imperial College and started a doctorate on distributed artificial intelligence at the London-based institution. He soon left his doctorate program and returned to Greece to start Cosmical Technology, providing consulting and development services to businesses. Panzaris studied electrical and computer engineering at the National Technical University of Athens (NTUA) and later turned to the humanities, getting a master’s in education from Harvard and a PhD on the history of technology from Stanford.

Add it up

The two friends, who met in the local blogosphere, came up with the idea for AthensBook in 2008. A few months later, the app was launched on an experimental basis. At the time, location-based products and services were no more than coffeehouse fodder. Similarly, location-based advertising, which relies on global positioning satellites and the triangulation of cell base stations by mobile operators to pinpoint location, was still in the offing.

“In 2008 extremely few companies were aware of mobile marketing that did not include your standard run-of-the mill SMS-based campaigns, or primitive — by smartphone standards — WAP sites,” Kaponis explained. Even advertising agencies specializing in digital media, largely Internet and mobile advertising, were just exploring the possibilities at that time, he says.

Convincing admen to take a risk on an unknown entity was an early challenge, but the two developers were fortunate to have created a pioneering service that was affordable enough for large businesses to try.

“The fact that we were bootstrapped made expanding our company harder, which in turn affected the product development rate,” Kaponis said. That probably wouldn’t have been much of an issue, he added, had they started their company in a more developed market with a better understanding of the high-tech sector.

To make matters worse, Greece was soon to be rocked by a severe debt crisis that also hit their sole source of revenue: ads. Total advertising spend has over the past three years shrunk to a small fraction of what it was in the late 2000s.

Nevertheless, “it wasn’t all bad,” Kaponis said, as web and mobile have lured a considerable chunk of ad money away from traditional media such as print, radio and television.

Personal touch

The latest edition of AthensBook features a smooth interface that connects to tens of thousands of venues including a full-featured cinema guide, restaurant guide, lists of nightlife venues, public services, museums and attractions, public transport information, taxi services, and live traffic information for the broader Athens area. To this end, the creators have made partnerships for premium, quality content like, for example, Infotrip for traffic data and ask4food.gr for restaurant reviews.

A Thessaloniki version, ThessBook, is also available.

Apart from upgrading content, the two developers have also tweaked the nature of the app to keep up with the web’s gradual shift to more user-generated, social content. The app now offers more social and lifestyle functionality, including user reviews, tips, and ratings. “The aim is to provide a more personal, smart and useful experience, rather than the more generic, utilitarian function it originally served,” Kaponis said.

Like most young Greek entrepreneurs, the two work with an eye fixed on what is going on outside the country. Despite the growing interest, the local market is uncomfortably small, or simply unwelcoming, for Greek start-ups that have never quite produced a blockbuster hit of Pinterest or Tumblr proportions. A very small number have managed to raise capital beyond seed level. “The human capital in Greece is a mixed bag: There are many people that are talented, ambitious and willing to work hard but who are tainted by a subpar education system and the nonexistence of an industry capable and willing to absorb them,” Kaponis said.

He and Panzaris have held discussions with a number of investors and potential partners, also from abroad, with the aim of creating useful, personal guides for cities around the world. They hope to release their first non-Greek guide in the near future.

They know that success in the digital media can be uncomfortably short-lived. Much bigger companies have risen and fallen in a very short time span. Kaponis and Panzaris say they make sure they keep their feet on the ground, but still try to mix pragmatism with a healthy dose of idealism. “AthensBook is a commercial product, so commercial success is always an important part of the equation,” Kaponis said. Their passion, however, he added, has always been to provide the best possible service and product, braving the very limited resources and difficulties of doing it here. “There is a rush associated with working on a product that is innovative, and, above all, truly useful to thousands or millions of people.”